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The Ultimate Guide to Medicaid

Talor Bianchini10 Aug 2021

Medicaid is health care coverage for low-income individuals, pregnant women, people with disabilities, children and their families, and the elderly. The program is funded by both the federal and state government and provides a wide range of benefits. 

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What Medicaid Is

Medicaid is federal and state-funded healthcare coverage that is provided to over 74 million Americans. As part of the Affordable Care Act (ACA), low-income individuals and families are granted low-cost health insurance. In the past, this option was only available to those living with a very low income. 

Still, because of its recent expansion, Medicaid now covers those living within 138% of the poverty level in most states. Each state operates differently and is sometimes referred to with different names, like ‘Medical Assistance.’ 

States With Expanded Medicaid as of July 2021

Source: Kaiser Family Foundation

The goal of Medicaid is to increase the amount of coverage in the U.S. and the quality of care offered to and keep people healthy and avoid costly procedures down the road. The Center for Medicaid and CHIP Services (CMCS) works closely with states to try and eliminate health disparities across the board. Medicaid expansion implemented in 2016 has vastly improved the previous services. According to The Department of Health and Human Services, 93% of those under managed care plans reported being very or somewhat satisfied with their coverage. 

The Children’s Health Insurance Program (CHIP)

The Children’s Health Insurance Program (CHIP) provides more affordable health insurance for children whose families are not eligible for Medicaid due to their annual income. Even if a family is not eligible to receive Medicaid, oftentimes, they don’t make enough money to buy a quality private health insurance plan that will cover them and their family. All state Medicaid programs offer CHIP, and some even cover pregnant women. 

Routine well visits and dental checkups are covered under the program, but there may be additional copayments or even monthly premiums in some states. In general, you won’t pay any more than 5% of your annual income for CHIP health coverage. Benefits vary across each state, but all are required to provide prescriptions, vision care, laboratory and x-ray screenings, and immunizations. 

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Qualifying for Medicaid 

Only certain low-income individuals are eligible for Medicaid under federal and state laws. To receive Medicaid in the state in which you live, you must be an official resident of that state and a U.S. citizen or other qualified non-citizen. Certain mandatory groups must be covered, including:

  • Blind
  • Children and Teenagers
  • Disabled
  • Elderly
  • Pregnant Women
  • And more

Your state may offer additional coverage options for special groups, so you should apply if you have limited income and access to resources, just in case. 

In addition to belonging to a certain group, there are also financial requirements to receive Medicaid from the government. This is calculated using the Modified Adjusted Gross Income (MAGI) tool. It is utilized for Medicaid, CHIP, and premium tax credits in the health insurance marketplace. Some individuals will have their financial eligibility determined using the Social Security Income program methods, such as those that are over 65, disabled, or blind. In addition, certain groups do not require an evaluation of their income to receive Medicaid. The income requirements vary depending on the state you live in and can be determined using a tool on the Medicaid website. Some states also have a ‘spend-down process,’ which allows you to subtract your medical expenses from your annual income so that you may become eligible for Medicaid. You then qualify for assistance if you fit the limits. 

Medicaid Benefits 

Although Medicaid is different in each state, there are certain benefits made mandatory by the federal government. These benefits include:

  • Early and Periodic Screening, Diagnostic & Treatment Services
  • Family planning services
  • Federally qualified health center services
  • Freestanding Birth Center services
  • Home health services
  • Inpatient hospital services
  • Laboratory & x-ray services
  • Nursing facility services
  • Nurse Midwife services
  • Outpatient hospital services
  • Pediatric/Family Nurse Practitioner visits
  • Physician services
  • Rural health clinic services
  • Transportation to medical care
  • Tobacco counseling for pregnant women

States have the option to provide optional benefits, which ultimately include anything not listed above. Popular optional services typically include:

  • Dental exams
  • Eyeglasses/exams
  • Hospice
  • Occupational therapy
  • Physical therapy
  • Prescription drugs
  • Respiratory care services
  • Speech, hearing, and language disorder services

An extensive list can be found here. You can visit your state’s Medicaid website to determine what benefits you will receive under your Medicaid plan. Even though there are different Medicaid eligibility groups, in general, under federal law, the state must provide services that are equal in amount, duration, and scope, to everyone. 

Alternative Benefit Plans

Most people who utilize Medicaid do so under a traditional plan, states also offer Alternative Benefit Plans (ABPs). This option was created so that states could offer their residents a healthcare plan that more similarly represents those on the health insurance market, as opposed to the limited benefits of a typical Medicaid plan. Instead of listing discrete items and services that the state will provide, they can instead reference a coverage benchmark that is based on one of four options:

  • Commercial health maintenance organization (HMO) with the largest insured commercial, non-Medicaid enrollment in the state
  • Health benefits coverage plan offered to state employees
  • Secretary approved coverage (benefits determined by Secretary of Health and Human Services)
  • Standard Blue Cross / Blue Shield preferred provider plan (PPO) offered through the Federal Employees Health Benefit Program (FEHBP)

 People who are receiving Medicaid due to the ACA expansion must do so through ABPs. States can mandate enrollment from some other eligibility groups as well, but not all groups are required. The federal government also requires that all ABP plans offer essential health benefits (EHBs), which the HHS secretary defines. 

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Medicaid Frequently Asked Questions (FAQs)

If you are still unsure about what Medicaid is and how it differs from other healthcare coverage, here are answers to some common questions. 

What is the difference between Medicare and Medicaid?

While both Medicare and Medicaid help provide low-cost healthcare, Medicare is an insurance program while Medicaid is an assistance program. Medicare is essentially the same across the entire U.S. and primarily helps those over the age of 65. People who have Medicare will also pay for part of the costs through deductibles. Medicaid serves the low-income population regardless of age and is different in every state. Patients sometimes have to pay a small copay, but there are usually no costs associated with Medicaid.  

Can I apply for Medicaid if I have a job?

Yes. Medicaid is income-based, not access-based. Even if your employer offers you health insurance, you will still be offered Medicaid as long as you meet the non-financial and financial eligibility requirements. 

How do I apply for Medicaid?

To apply for Medicaid, you can go straight to your state’s Medicaid office. You can also apply for it through the Health Insurance Marketplace. If you are unsure if you will receive benefits, you can also call the office to determine eligibility. It can take weeks to have your application processed, so don’t be discouraged if you don’t hear back right away. 

Can I get Medicare and Medicaid?

Yes. If you qualify for both Medicare and Medicaid, you are known as a ‘dual eligible.’ While having both of these, you most likely will have all of your health care costs covered. Medicare will always pay first, and Medicaid second. This is useful for services like nursing homes, which Medicare doesn’t cover. 

Is Medicaid free?

Contrary to popular belief, Medicaid services are not always free. People often have to pay small co-payments or other related expenses. It also depends on which state you live in since each can offer different services under their Medicaid programs. Make sure to contact your state Medicaid office to determine what you will be responsible for paying for. 

Bottom Line

Having quality and affordable healthcare is essential to maintaining a healthy lifestyle. If you are low-income, have a disability, are pregnant, or have children, you may qualify for Medicaid. You’ll receive benefits like physician visits, screening tests, inpatient and outpatient hospital visits, and transportation to medical care at almost no cost to you. 

No one should have to deny healthcare because they cannot afford it. If your annual income is outside the Medicaid limits and you need coverage fast, consider Mira. As an affordable health insurance alternative, Mira provides access to same-day lab testing, up to 80% off on over 1000 different prescriptions, and low-cost urgent care visits, all for just $45 per month.